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SEC Names Anne Small as General Counsel

SEC Names Anne Small as General Counsel

The Securities and Exchange Commission announced that Anne Small has been named General Counsel of the federal agency. 

 
Ms. Anne Small comes to Securities and Exchange Commission from the White House Counsel’s Office where she served as a special assistance to the President and Associate Counsel to the President since 2011. Ms. Small has advised on legal policy questions with a focus on economic issues. 
 
Anne Small, prior to being named General Counsel of the Securities and Exchange Commission, previously worked at the SEC as Deputy General Counsel for Adjudication and Litigation, helping to oversee enforcement issues, adjudications, and appellate matters. Ms. Small becomes the first woman to serve as General Counsel of the United States Securities and Exchange Commission. 
 
“I am thrilled that Anne will be returning to the agency at a moment when our rule writing is in full swing and our program continues to attack cases involving complex transactions,” said Mary Jo White, the chair of the agency. “The Securities and Exchange Commission will benefit from Ms. Small’s judgment, experience, and talent.”
Before assuming a role with the federal government, Ms. Small was employed with WilmerHale LLP, where she served as partner in the litigation unit. Ms. Small was involved in securities and commercial litigation, a wide range of criminal and civil matters, and trial work. 
 
In response to her hiring, Ms. Small said, “It is an absolute honor to return to the Securities and Exchange Commission. I look forward to working with the staff in the General Counsel’s Office and serving Mrs. White and the other professionals in the agency to protect investors. 
 
Ms. Anne Small is expected to arrive at the Securities and Exchange Commission soon and will succeed former General Counsel Geoffrey Aronow, who will become a senior member to the Chairman. 
 
Ms. Small started her law career as a clerk for Judge Guido Calabresi of the United States Court of Appeals and for Justice Stephen Beyer on the United States Supreme Court. Ms. Small received her J.D. in 2001 from Harvard Law School, where she earned the Sears Prize and served as the President for the Harvard Law Review. 
 
 
Source: SEC.GOV

PETA Playing Hardball: Environmental Advocacy Group Purchases a Stake in SeaWorld

PETA Playing Hardball: Environmental Advocacy Group Purchases a Stake in SeaWorld

 

PETA purchased stock in SeaWorld, which went public last week, to pressure the company into freeing what the environmental protection group deems as “enslaved” killer whales. 
 
The message from PETA is simple: Free the killer whales. David Perle, a leader and spokesman for the People for Ethical Treatment of Animals, claims his organization purchased 80 shares of SeaWorld worth roughly $2,275 when SeaWorld went public earlier this month. 
 
According to the animal rights organization, the purchase of stock is the smallest number of shares needed to give them the right to attend and speak at annual shareholder meetings, and to submit resolutions to encourage policy changes. 
PETA said its first order of business as a shareholder is to demand the release of its killer whales, starting with Corky, who has been performing with the company for almost 50 years. 
 
PETA claims it wants to educate other shareholders about the entertainment park’s cruel tactics that involve tearing dolphins and orcas away from their families and imprisoning them in minuscule tanks where they suffer captivity-related illness and stress. 
 
Spokespeople for SeaWorld are having none of PETA’s stock purchase and subsequent demands, citing the animal rights groups’ “strategy of attempting to disrupt business through publicity stunts, protests, and shareholder resolutions” is shameful. 
SeaWorld added that Corky and the other animals under SeaWorld’s care “live in next-generation facilities and are cared for by skilled professionals in accordance with federal and state laws, including the Federal Marine Mammal Protection Act and the Animal Welfare Act.”
 
Spokespeople for SeaWorld said the company will attempt to serve PETA as it would with any other shareholder by creating value in the company. That said, SeaWorld also claimed that PETA’s views are “well outside of the public’s view” and that their stock-purchasing strategy is a poor attempt to disrupt the company’s practices. 
 
 
Source: whitehouse.gov

Capital One Facing the Heat: Banking Giant Charged by SEC

Capital One Facing the Heat: Banking Giant Charged by SEC

 

The United States Securities and Exchange Commission charged Capital One Financial and two prominent executives for understating millions of dollars in auto loan losses that were incurred during the months leading up to the financial crisis. 

An investigation conducted by the United States Securities and Exchange Commission found that in financial reporting for the second and third quarters of 2007, the Capital One Financial Corporation failed to account for losses in its auto financing business. The profitability of this business was derived from extending credit to subprime customers. As credit markets began to crumble, the banking giant’s internal loss forecasts found that the declining environment had a substantial impact on its loan loss expense. That said, Capital One did not properly incorporate these assessments into its financial reporting, and as a result understated its loan loss expense by roughly 18 percent in the second quarter and nearly 10 percent in the third quarter.

In response to these charges, Capital One agreed to pay over $3.5 million to settle the SEC complaint. The two executives named in the complaint—former CRO Peter Schnall and Former Credit Officer David LaGassa—also agreed to the charges filed against them. 

“Honest and accurate financial reporting is a principal obligation for any public company, especially a bank’s accounting for the provision of loan losses during a time of financial distress,” said George Canellos, a Director of the SEC’s enforcement division. 

According to the SEC’s order regarding administrative proceedings, beginning in 2006 and continuing through the third quarter of 2007, Capital One’s Auto Loan business experienced substantially higher charge-offs and delinquencies concerning its auto loans than it originally had publicized. The increased losses occurred within every loan type in each of the company’s lines of businesses. 

Capital One’s understatements regarding its auto loan losses violated the reporting, internal controls provisions, and records of the federal securities laws, primarily Section 13 of the United States Securities Exchange Act. Capital One and the executives named in the matter neither denied nor admitted the findings regarding the SEC’s order requiring the business to cease and desist from causing or committing any violations of U.S. securities laws. 

This investigation was conducted by Assistant Chief Accountant Amanda deRoo and Senior Counsel Anita Brand and supervised by Director Conway Dodge. 

Source: SEC.gov

Emergency Situation: Millions of Americans can’t afford to go to the Doctor

Emergency Situation: Millions of Americans can’t afford to go to the Doctor

 

 
An increasing number of Americans are skipping medical care simply because they cannot afford it. Roughly 80 million people, or close to 45 percent of America’s working-age adults, did not go to the doctor in 2012 because of the cost, according to various studies conducted by the Commonwealth Fund’s Biennial Health Insurance Survey. This figure is up from 75 million people who did not access medical services in 2010 and 63 million in 2003. 
 
Not surprisingly, those Americans who were uninsured or had limited health coverage were most likely to have trouble affording legitimate health care. However, 28 percent of working-age adults with adequate insurance also were forced to forgo treatment because of the lofty price.
 
Roughly three in 10 adults, said they did not visit a clinic or doctor when they encountered a medical problem while more than 25 percent of Americans did not fill a prescription or skipped recommended medical tests, follow-up visits or treatments. One in five Americans said they did not receive needed specialist care because of the cost. 
 
Nearly 30 percent of Americans with a chronic condition such as diabetes, hypertension, heart disease and asthma who required medication said they opted not to fill prescriptions or skipped doses because they could not afford to pay for their treatment. 
 
Even those Americans with adequate coverage find themselves shelling out more for co-payments and deductibles. The percentage of Americans with deductibles larger than $1,000 more than tripled between 2003 and 2013, reaching a depressing 25 percent. 
 
The surveys conducted by the Commonwealth Fund also found that nearly 85 million people, or half of America’s working-age population, were without insurance for a time last year or incurred such high out-of-pocket expenses relative to their income that they were regarded as under-insured. This figure is up from 81 million in 2010 and 61 million in 2003. 
 
The lone bright spot revealed in the report is that fewer young adults, individuals between the ages of 19 to 25, were uninsured. This share fell to 41 percent in 2012, which is down from 48 percent two years earlier. This drop is largely due to the Affordable Care Act, which permits young adults to stay on their parent’s insurance plan until they reach the age of 26 years old.  
 
 
Source: whitehouse.gov

Time to Pay the Piper: Level Global Agrees to Pay Nearly $22 Million to Settle Insider Trading Charges

Time to Pay the Piper: Level Global Agrees to Pay Nearly $22 Million to Settle Insider Trading Charges

 

The United States Securities and Exchange Commission announced that Greenwich.-based hedge fund advisory firm Level Global Investors will pay in excess of $21.5 million to settle charges that one of its founders, who also served as the funds’ portfolio manager and its lead analyst engaged in numerous insider trading in the securities of Nvidia Corp. and Dell Inc. 

During January of last year, the SEC filed insider trading charges against Level Global, a former analyst Sam Adondakis, co-founder Anthony Chiasson, and six other individuals, including five investment professionals and a hedge fund advisory company. 

The complaint, which was filed in federal court in New York City, suspected that Adondakis was a member of a group of associated hedge fund analysts who unlawfully procured highly sensitive information regarding the performance of Nvidia and Dell before the information was released to the public. The illicitly procured information involved Nvidia and Dell’s revenues, profit margins and indicated that the companies’ quarterly results would contrast significantly from consensus expectations rendered by Wall Street analysts. 

According to the SEC, during 2008 and 2009, Adondakis relayed the information to Chiasson, who used it to execute trades on behalf of several hedge funds managed by Level Global. This passing of information ultimately reaped millions of dollars in illegal profits for those involved. In 2011, followings reports of an SEC investigation, Level Global, which previously managed as much as $4 billion, announced that it close its business and begin returning money to damaged investors. 

“The events of insider trading at Level Global was not an isolated event; it occurred several times over, and involved a number of companies and a number of quarterly announcements,” claimed a Senior Associate Director of the agency’s New York Regional Office. “This case serves as a reminder that the United States Securities and Exchange Commission will hold several hedge fund managers accountable when their employees go against the securities laws of the United States.”

The settlement with Level Global requires the firm to disgorge nearly $11 million in fees that it acquired from the alleged insider-trading scheme, along with $1.3 million in interest and an added penalty of $10 million. 

source: sec.gov

41 Percent of College Graduates Overqualified for what they do

41 Percent of College Graduates Overqualified for what they do

 

 
More than 4 out of 10 recent college graduates say they find themselves stuck in menial jobs that do not require a college degree. A national survey released to the public on Tuesday found that 41 percent of college graduates from the last two years are stuck in jobs that do not require a college degree. 
 
Accenture—a prominent consulting firm—talked to a little over 1,000 students who graduated college in 2011 and 1012 and have not returned to graduate school. In addition to those young people who are underemployed, 11 percent said they are unemployed, with over 7 percent of individuals reporting that they have not had a job since graduating. 
 
The lack of job opportunities in their desired fields are weighing college graduates down as nearly 50 percent of the recent graduates feel they would find more success in the job market if they had pursued a different major. 
 
Nearly two-thirds of those surveyed claimed, they would require additional training in order to start their career, with 42 percent saying they plan on going to graduate school in the future. This is a sharp contrast in thinking from those young people still in college: a separate survey conducted by Accenture found that only 17 percent of the class of 2013 expects to head to graduate school in the future. 
 
The unsteady job market will continue to make things difficult for recent grads, according to several professionals at Accenture’s Talent & Organization practice in the United States. “It is extremely logical if there are more meaningful jobs available that you will have fewer and fewer young people in the market looking for employment opportunities,” said Katherine Lavelle, the managing director of Accenture’s Talent & Organization. 
 
 
Source: whitehouse.gov

A Lifelong of Pain and Suffering: Many Boston Victims Face Lifetime of Medical Bills

A Lifelong of Pain and Suffering: Many Boston Victims Face Lifetime of Medical Bills

 

 
More than $30 million has been graciously donated to victims of the Boston Marathon Bombing, yet it may not be nearly enough to cover the lifelong medical bills for many of those impacted by the tragedy. 
 
The state of Massachusetts, where many of the 260 or so victims reside, mandates residents to have health insurance. However, even those with coverage could face extensive out-of-pocket costs. “This problem will unfortunately be with many of the victims for the remainder of their lives,” said Praveen Subramani, who started a crowd funding campaign for his friend’s parents, Eric and Ann Whalley. Eric suffered severe brain trauma and extensive nerve damage to his foot, while Ann must undergo skin grafting and a bone graft to heal her serious injuries. 
 
The average cost for a day of treatment in a U.S. hospital is $4,287, and those with serious injuries often encounter exorbitant bills. Patients with traumatic brain injuries encounter average per-day costs of $8,000 for acute care and $2,225 for inpatient services. 
 
Treatment costs for the most severely injured victims of the marathon bombing could total hundreds of thousands of dollars, according to numerous professionals with the Health Economics Program at Northwestern’s Feinberg School of Medicine.  
Aside from rehabilitation and hospital costs, a large percentage of those injured will lose out on months of income while they heal. Some of these individuals may also require mental health services to treat anxiety and post-traumatic stress disorders. Moreover, for the more than a dozen victims who lost limbs, their injuries will require a lifetime of costs that mount up rather quickly. 
 
Surgical amputations can cost as much as $40,000 while a single prosthetic limb can cost from $5,000 to more than $50,000, depending on the level of technology. Over a lifetime, medical costs for an amputee can exceed $500,000, and additionally, some victims may pay for modifications to their care and home, which can run an individual tens of thousands of dollars more. 
 
Twenty states in the U.S., including Massachusetts, have passed fair insurance laws for amputees; these laws require a certain level of medical coverage for prosthetic care, and in some of these states, insurance typically covers nearly 80 percent of the costs. 
 
In the 30 states across the nation without laws, coverage can be far worse, with some prosthetic coverage caps falling as low as $2,000 per year. Citing the gaps in coverage, the American Orthotic and Prosthetic Association announced that it would establish a coalition to help victims who have inadequate coverage to satisfy their initial costs. 
 
 
Source: whitehouse.gov

Sign of things to come: Jobless Claims Dip to 5-Year Low

Sign of things to come: Jobless Claims Dip to 5-Year Low

 

 
After rising as high as 670,000 during the financial crisis, weekly jobless claims are currently at around half of that level. First-time claims for unemployment insurance dropped to their lowest mark in five years last week, providing positive signs that fewer layoffs are taking place in the strengthening economy.
 
According to the United States Department of Labor, approximately 324,000 people filed initial claims last week. This report was better than expected on nearly all accounts; many economists and Wall Street analysts were anticipating an increase in claims. 
 
The report issued by the United States Department of Labor revealed that unemployment claims had declined by nearly 19,000 from the previous week, marking the lowest figure since January of 2008.
 
The weekly numbers can be dicey as many economists prefer to evaluate a four-week moving average to level out the inherent volatility—a figure that also declined according to the United States Department of Labor. 
 
Claims figures are regarded as a legitimate gauge of layoff numbers and provide the first look at how the domestic job market fared in a given month. During the height of the financial crisis in 2009, claims had surged as high as 670,000 a week. 
 
Lay-offs have now restored to pre-recession levels; these figures are consistent with the normal churnings of the job market. That said, hiring of new employees remains sluggish. 
 
A separate report released this week, showed that businesses were reluctant to hire new workers throughout the month of April. Domestic employers added nearly 120,000 workers, marking the weakest month for hiring since last September. 
 
The Labor Department’s jobs report is scheduled to release tomorrow morning. The United States economy added an average of 160,000 jobs each month over the last year, and April is expected to fall in line with this modest pace of hiring. The majority of economists are expecting the report to show that the economy added roughly 140,000 in April, marking an increase of nearly 90,000 jobs from March. Economists are also expecting the unemployment rate to remain at roughly 7.6 percent. 
 
 
Source: whtiehouse.gov

SEC Charges Two Mutual Funds for Inaccurate Disclosures about Decisions on Behalf of Shareholders

SEC Charges Two Mutual Funds for Inaccurate Disclosures about Decisions on Behalf of Shareholders

 

 
The United States Securities and Exchange Commission today charged the gatekeepers of two mutual fund trusts with misleading disclosures regarding the factors they deemed when renewing or approving investment advisory contracts. 
A decent percentage of trusts are created as turnkey fund operations that launch several funds to be managed by different unaffiliated professionals and overseen by a board of trustees. The U.S. federal securities laws require mutual fund directors to evaluate a fund’s contract with its adviser, and the funds must then report back to shareholders regarding the material factors considered by the directors in initiating these decisions. The SEC has been taking a broad look into the investment advisory contract renewal process and the associated fee arrangements latent in the fund industry. 
 
An investigation that arose from an evaluation of the Northern Lights Variable Trust and the Northern Lights Fund Trust found that some of the trusts’ shareholder reports misrepresented information and/or omitted material details concerning how they evaluated particular factors in reaching their decisions on for their funds and on behalf of the connected shareholders. The trusts’ chief compliance officer, along with the trustees of the Northern Lights Compliance Services were found responsible for causing the violations as according to recordkeeping and reporting provisions, the trusts’ fund administrator (Gemini Fund Services) caused the violations.
 
All associated firms and trustees have agreed to settle the charges with the United States Securities and Exchange Commission. The five trustees named in the enforcement action are: Lester Bryan of Utah, Michael Miola of Arizona, Gary Lanzen of Nevada, Anthony Hertl of Florida, and Mark Taylor of Ohio. 
 
According to the order, the Northern Lights Trusts included 71 mutual fund series which were mostly managed by different advisers and sub-advisers. These trustees conducted 15 board meetings from January 2009 to December of 2010; during these meetings the individuals made decisions regarding 113 advisory and 32 sub-advisory contracts. Section 15 of the Investment Company Act mandates all fund directors to request and evaluate material information that is necessary to determine the terms of any contract for investment professionals of registered investment companies. 
 
 
Source: sec.gov

White House Report: The Employment Situation in April

White House Report: The Employment Situation in April

 

 
Although more work remains to be done, today’s employment report offers further evidence that the United States’ economy is continuing to strengthen after undergoing  one of the worst recessions since the Great Depression. The White House states that it is crucial to remain focused on pursuing initiatives to bolster job creation and expand the middle class, as the nation continues to fight its way back from one of the worst economic collapses of all time. 
 
Today’s job report issued by the United States Bureau of Labor Statistics shows that private sector companies added over 176,000 jobs in April. Total non-farm payroll employment increased by nearly 166,000 jobs last month, and the February and march employment figures were revised upwards by a total of 114,000 jobs. The United States economy has now added private sector jobs every month for 38 straight months, and a total of nearly 7 million jobs has been added to the labor market over that period of time. Moreover, an additional 800,000 private sector jobs have been added to the labor market over the last four months. 
 
The American household survey revealed that the unemployment rate dipped down from 7.6 percent in March to 7.5 percent last month. This rate marks the lowest level since December of 2008. The labor force participation rate; however, remains unchanged at 63.3 percent in April. 
 
The Obama administration continues to urge Congress to replace the sequester with a balanced deficit reduction plan. The White House states that President Obama will continue to put pressure on Congress to act on measures that he called for in his State of the Union to make the nation a magnet for employment opportunities. 
 
According to the establishment survey, employment rose notably in business and professional services, bars and restaurants, health care and social assistance, and retail trade throughout the month of April. Construction declined by roughly 6,000 after increasing for 10 consecutive months and adding nearly 182,000 jobs during this period. 
 
 
Source: whitehouse.gov
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